European stocks experienced a modest decline on Monday, the first trading day of September, as investors evaluated the economic outlook and awaited key data releases later in the week.
The pan-European Stoxx 600 index was down 0.26% by mid-morning, with most sectors and regional markets in retreat. Retail stocks led the losses, dropping by 1.06%, while the telecoms sector managed to gain 0.55%.
Amidst the general market decline, shares of the UK-based real estate listings platform Rightmove experienced a notable increase, rising by 23.22% following the announcement by Australian rival REA Group that it was contemplating a possible acquisition bid for the business. The news caused Rightmove’s stock to rise as much as 24% earlier in the session.
This decline in European markets comes after last Friday’s stronger close, when investors responded to data on global inflation and rumors of possible interest rate cuts from the US Federal Reserve. Data released last week indicated that the personal consumption expenditures price index—the Fed’s preferred inflation gauge—rose by 0.2% in July on a monthly and annual basis, in line with economists’ projections. This data will probably have an impact on the Fed’s next rate decision.
The manufacturing PMI data from important economies such as Spain, Italy, France, the UK, and Germany is also of interest to European investors. Due to the Labor Day holiday, US markets were closed on Monday, which resulted in lower trading volumes in Europe.
Following the election victories of populist parties in the German state elections over the weekend, market trepidation was exacerbated by political unpredictability in Europe. This affected investor sentiment along with weak Asian markets and persistent worries about China.
Despite these challenges, some sectors, like telecoms, managed to post gains, and certain stocks, like Rightmove, bucked the overall downward trend. Investors remain cautious as September is historically a weaker month for stocks and bonds, and this year appears to be following that pattern.
